Ed. 1: Delay Analysis – The Most Appropriate Method

Articles

Yazeed Abdelhadi, Director, Delay, specialises in delay analysis and has begun writing a series of industry thought leadership articles.

The first article in this Delay Series centres on delay analysis methodologies, both from the prospective and retrospective viewpoints.

Delay Analysis can be described as the application of knowledge and experience to identify the delay, the causes of delay, and the amount of delay in projects. There are multiple standard delay analysis methods in the industry, but there is often confusion as to the selection and implementation of these methods.

Industry Guidelines

In 2002, the Society of Construction Law (SCL) issued a protocol1 which included guidelines for performing delay analysis (SCL Protocol). The SCL Protocol listed out the following 4 delay analysis methods:

  • As-planned v as-built,
  • Impacted as planned,
  • Collapsed as-built, and
  • Time impact analysis.

The SCL Protocol included strong preference for the “Time Impact Analysis” method by, for example, stating that:

“Time impact analysis is the most thorough method of analysis, although it is generally the most time-consuming and costly when performed forensically” 

“The Protocol recommends that this methodology be used wherever the circumstances permit, both for prospective and (where the necessary information is available) retrospective delay analysis…”. 

“… It is also the best technique for determining the amount of EOT that a Contractor should have been granted at the time an Employer Risk Event occurred …This technique is the preferred technique to resolve complex disputes related to delay and compensation for that delay”.  

In 2015, SCL issued Rider 12 to the SCL Protocol (SCL Rider 1) followed by a second edition of the Protocol3 in 2017 (SCL 2nd Protocol). Both SCL Rider 1 and the SCL 2nd Protocol lists out the following 6 delay analysis methods:

  • Impacted As-Planned Analysis,
  • Time Impact Analysis,
  • Time Slice Windows Analysis,
  • As-Planned versus As-Built Windows Analysis,
  • Longest Path Analysis, and
  • Collapsed As-Built Analysis.

The SCL 2nd Protocol maintained the preference for the “Time Impact Analysis” method for contemporaneous analysis of delay (i.e. prospective delay analysis). However, it adopted a new position in that “there is no longer a preferred delay analysis methodology where that analysis is carried out time-distant from the delay event or its effect” (i.e. retrospective delay analysis).

“…there is a trend of over reliance on these guidelines as if they form part of local legislation.”

However, in my experience, despite the explicit change in the SCL’s approach, the use and application of the Time Impact Analysis method is still prevailing in the industry, including for retrospective delay analysis scenarios.

In parallel, the Association for the Advancement of Cost Engineering (“AACE International” or “AACE”) issued its recommended practice 29 which deals with forensic schedule analysis (Latest revision issued in 2011 (RP-29R-03))4 and recommended practice 52 which deals with prospective time impact analysis – as applied in construction (Latest revision issued in 2011 (RP-52R-06).5

RP-52R-06 provides general guidelines for the implementation of prospective delay analysis methods. However, RP-29R-03 provides comprehensive recommendations for the selection and implementation of retrospective delay analysis methods and lists out the following 9 “Method Implementation Protocols”:

  • Observational / Static / Gross (MIP 3.1),
  • Observational / Static / Periodic (MIP 3.2),
  • Observational / Dynamic / Contemporaneous As-Is (MIP 3.3),
  • Observational / Dynamic / Contemporaneous Split (MIP 3.4),
  • Observational / Dynamic / Modified or Recreated (MIP 3.5),
  • Modelled / Additive / Single Base (MIP 3.6),
  • Modelled / Additive / Multiple Base (MIP 3.7),
  • Modelled / Subtractive / Single Simulation (MIP 3.8), and
  • Modelled / Subtractive / Multiple Base (MIP 3.9).

“…if an Impacted As Planned method, which is a forward-looking analysis, is performed before or contemporaneously with the event, both AACE and SCL consider it as a prospective delay analysis.”

“Both SCL and AACE acknowledge that delay analysis comes down to common sense, professional judgment, and expert opinion of the delay analyst.”

The 2nd SCL Protocol and RP-29R-03 use different terminologies, which makes it difficult to compare between them. For example, delay analysis methods are commonly categorised as prospective or retrospective, which represents the point in time the analysis is performed; e.g. prospectively (before, or contemporaneously with, the event) or retrospectively (after the event). This is the terminology adopted by the AACE recommended practices.

However, in the SCL 2nd Protocol, prospective delay analyses refers to forward-looking analysis (i.e. estimation of future delay impact) and retrospective delay analyses refers to backward-looking analysis (i.e. assessment of actual delay impact), regardless of the of the point in time the analysis is performed. For instance, if an Impacted As Planned method, which is a forward-looking analysis, is performed before or contemporaneously with the event, both AACE and SCL consider it as a prospective delay analysis. However, if it is performed after the event or completion of the project, AACE considers it as a retrospective delay analysis6 while SCL considers it prospective delay analysis.  

Despite the difficulty in comparing between the SCL 2nd Protocol and RP-29R-03, in my opinion, SCL’s delay analysis methods and AACE’s Method Implementation Protocols can be matched, and the overall recommendations and conclusions are very similar.

In my experience, the SCL 2nd Protocol and RP-29R-03 are the commonly referred guidelines for the selection and implementation of delay analysis methods.

However, there are two main issues:

  • The guidelines help in reducing the procedural subjectivity. However, there is a trend of over reliance on these guidelines as if they form part of local legislation. This is unjustified given that both SCL and AACE unequivocally state that they serve as guidelines only.7 Reference should always be made firstly to the contract and any requirements.  
  • There is significant variance in the interpretation of the facts, assumptions made and implementation of the methods. Both SCL and AACE acknowledge8 that delay analysis comes down to common sense, professional judgment, and expert opinion of the delay analyst, which include several subjective interpretations and decisions. It is therefore important to explain assumptions made and opinions reached.

The Most Appropriate Method

Irrespective of the method name or category, the crux lies in the way you perform the analysis and describe what you have done. In 2019, the judgment by Justice Hammerschlag in the New South Wales Supreme Court decision of White Constructions Pty Ltd v PBS Holdings Pty Ltd,9 highlighted that the emphasis is on the “evidence of the actual cause and impact” rather than the selection of a commonly acceptable method or the expert’s opinion. Consistent with the standard of proof required in civil proceedings, the analysis is required to attain the balance of probabilities threshold, in terms of the delay causation and periods.

In conclusion, I can confidently say that there is no single method that is most appropriate in all cases. There are multiple commonly acceptable methods in the industry and each of them may be the most appropriate under certain circumstances. Each of these methods has shortcomings which must be considered, explained and defended by the delay analyst when selected.

In my view, it is prudent and advisable to acknowledge the industry practice and use one of the SCL’s and/ or AACE’s adopted delay analysis methods whenever possible. However, in every case and regardless of the selected method, it is essential to demonstrate causation and explain the following:

  • the factors considered for selecting the delay analysis method (methods),
  • what the method is, how it is applied and how the analyst has dealt with its shortcomings, and,
  • the facts relied upon, instructions, interpretations, assumptions, opinions, and conclusions.

In my next articles, I will further expand on the items listed above and in turn, starting with the factors influencing the selection of the delay analysis methods. 

expect delays road sign

References

  1. The Society of Construction Law Delay and
    Disruption Protocol, October 2002 (and October 2004 reprint) ↩︎
  2. Rider 1 – The Society of Construction Law Delay and Disruption Protocol, July 2015  ↩︎
  3. The Society of Construction Law Delay and Disruption Protocol, 2nd edition, February 2017 ↩︎
  4. AACE® International Recommended Practice No. 29R-03 – Forensic Schedule Analysis (25 April 2011 Revision) ↩︎
  5. AACE® International Recommended Practice No. 52R-06 – Prospective Time Impact Analysis – As Applied in Construction (4 May 2017 Revision)  ↩︎
  6. RP-29R-03, section 1.4 (A)(2) “…Note that forward-looking analyses (such as ‘additive modeling’) performed after project completion are still retrospective in terms of timing. What is classified here is the real-time point-of-view of the analyst and not the method of analysis). In other words even forward-looking analysis methods implemented retrospectively have the full benefit of hindsight at the option of the analyst”. ↩︎
  7. For example, 2nd SCL Protocol introduction section (“The object of the Protocol is to provide useful guidance on some of the common delay and disruption issues…”, “It is not intended that the Protocol should be a contract document…” ,“Overall, the Protocol aims to be consistent with good practice, but is not put forward as the benchmark of good practice throughout the construction industry…”) and RP-29R-03 introduction section (“to provide a unifying reference of basic technical principles and guidelines”, “This RP is not intended to establish a standard of practice, nor is it intended to be a prescriptive document applied without exception. Therefore, a departure from the recommended protocols should not be automatically treated as an error or a deficiency as long as such departure is based on a conscious and sound application of schedule analysis principles”).  ↩︎
  8. For example, 2nd SCL Protocol (“Users of the Protocol should apply its recommendations with common sense”, “… the conclusions derived from which must be sound from a common sense perspective”, “It will also be necessary for the parties to apply common sense and experience to the process to ensure that all relevant factors are taken into account, and that any anomalous results generated by the delay analysis are properly managed”) and RP-29R-03 (“… the RP should be used in conjunction with professional judgment and knowledge of the subject matter”, “… it relies upon professional judgment and expert opinion and usually requires many subjective decisions”, “All methods are subject to manipulation as they all involve judgment calls by the analyst whether in preparation or in interpretation”) ↩︎
  9. White Constructions Pty Ltd v PBS Holdings Pty Ltd [2019] NSWSC 1166 ↩︎